‘HUNG OUT TO DRY’ BY SUPPLY MANAGEMENT?
BEEF FARMERS HAVE SAY ON NAFTA ROADBLOCK
Whenever the phrase “Canadian farmers” makes it into a headline, it’s almost always referring to the Dairy Farmers of Canada, the extremely powerful lobby group charged with defending Canada’s system of supply management.
With supply management once again at the centre of major trade negotiations, the National Post called up a different kind of cow farmer to get their view.
Canada’s beef producers do not operate under any form of supply management, and it turns out they’re a little miffed about the sector that is.
BEEF FARMERS WILL BE DAMNED IF NAFTA FALLS APART OVER CHEESE
No beef farmers contacted by the National Post had any contempt in their hearts for dairy farmers. Like any farmer, they get up early, they work hard and they drive trucks with bumper stickers reading “NO FARMERS, NO FOOD.” While the beef sector has never been a fan of supply management, opposition crystallized when the dairy quota system held up TPP negotiations — and it’s now a major block to a renegotiation of NAFTA. Of the roughly 620,000 tonnes of Canadian cow exported every year, three-quarters of it go to the United States. “If we were to have any tariffs being placed on our product, we are a very low margin business; it would be devastating to the industry,” said Karen Gregory with Alberta’s Cattleland Feedyards. And beef is not alone; dairy is a small portion of a Canadian agricultural industry that relies on exports and free trade. “I understand (dairy’s) trepidation, but there are hundreds of thousands of other farmers that are being potentially hung out to dry if NAFTA fails because of supply management,” said Ryan Kasko, a cattle feeder from near Lethbridge, Alta.
CANADIAN BEEF HAS THRIVED UNDER THE FREE MARKET
“First and foremost we are free marketers; that’s where we’ve always been,” said Jeff Ball, a southern Alberta cattle feeder. The beef sector did not opt in when supply management was being drawn up in the 1970s, and now the industry owes roughly half of its production to the foreign market. It’s why Canadian beef farming has become a much larger operation than Canadian dairy. There are 60,000 Canadian beef farms and feedlots as compared with roughly 11,300 dairy operations. Being unmoored to the forces of world trade has been a net positive, but multiple beef farmers contacted by the Post sympathized with dairy farmers who would wish to shield themselves from competitive pressures. But an Alberta ranch that pays its bills by shipping cows to Montana can also readily sympathize with a Wisconsin dairy farmer who cannot sell to Ontario. The beef industry’s fear is that if U.S. ire against supply management does result in retaliatory tariffs, the natural recourse would be to set its sights on Canadian beef.
WORLD TRADE HASN’T TURNED BEEF INTO INEDIBLE POISON
A common argument from the Dairy Farmers of Canada is that if market controls are abolished, Canadian grocery stores will suddenly be flooded with low-quality American milk swimming with hormones and steroids. At the recent Conservative convention in Halifax one of the briefing notes provided to dairy lobbyists was to remind delegates that their milk is free of rBST — a hormone banned by Health Canada. Canadian beef producers have used forms of muscle growth hormones since the 1960s, but Ryan Thompson, owner of Living Sky Beef near Minton, Sask., laughed at the argument that food safety is tied to market controls. “To say that monopolizing a market will ensure safety, they’re not even connected,” he said. Free market forces can also have their own effect on agricultural practices. A few years ago A&W angered many Canadian beef producers by marketing hormone-free beef, a policy that required them to source much of their meat abroad. St-Hubert tried something similar when it introduced “grain-fed, airchilled” chicken. But since chicken is supply managed, St-Hubert didn’t have the option to source abroad and was forced to spend years convincing reluctant Canadian producers to change their production methods. “Consumers vote with their wallet,” said Jeff Ball, pointing to a blossoming market for grass-fed, hormonefree and other specialty beef. “I think that getting rid of the marketing boards would lead to more diversity and product selection.”
IN CANADA, BEING ABLE TO SLAUGHTER COWS DOESN’T MEAN YOU CAN MILK THEM
Plenty of Canadian beef farms run diversified operations: a pig pen here, a field of mixed grain there. For a beef farmer already well-versed in cows, the most obvious side venture would be to open up a dairy operation. But the controls around dairy farming ensure that even if a farmer could get his hands on a quota, it’s going to cost him roughly $30,000 per cow. “It’s tough enough being a young person trying to farm as it is, try being a young person having to buy quota,” said Thompson. When one has a lot of dairy neighbours, it can also be hard to compete for land and feed with an industry that has a government-guaranteed profit. To be sure, there are some government supports for the beef sector such as AgriStability, but those programs can only compensate for partial losses.
CONSUMERS VOTE WITH THEIR WALLET.
A FUTURE WITHOUT SUPPLY MANAGEMENT NEED NOT BE A BLEAK HELLSCAPE
New Zealand abolished supply management decades ago. After an initial shock that did indeed push some producers out of the market, the country exploded into one of the world’s most prolific exporters of milk. “Everyone said at the time, ‘what a disaster, the sky is falling in,’ but if you stand back and look at it now after 30 years, our industry ... is nearly four times the size it was then,” New Zealand dairy farmer Earl Rattray told Reuters in 2015. Canadian beef farmers were similarly optimistic, even as they fight for shelf space with a U.S. beef sector that is enriched by subsidies. “I firmly believe that the milk produced in Canada is the highest quality in the world, and I don’t think they need to be afraid of some other country coming in and taking their market,” said Thompson.